Final answer:
Clades are formed through the splitting of existing clades, creating branching diagrams of evolutionary relationships. Sometimes, groups can also merge, as seen in the appearance of eukaryotes and the origin of multiple algal groups. Cladistic approaches and hierarchical systems have difficulty dealing with this possibility.
Step-by-step explanation:
Clades are formed within clades through the splitting of a previously existing clade. This results in a branching diagram that represents the evolutionary relationships between organisms. Sometimes, groups can also merge, which is not well dealt with by cladistic approaches or hierarchical systems. Examples of groups that have merged include the appearance of eukaryotes through the endosymbiont theory and the origin of multiple algal groups through secondary endosymbiosis.